Question of the Day|
If you've given up on the stock market and ownership of any sort how do you plan to enjoy a long life beyond social security?
Click here to post your answer and let Charles know what you think. He will air some on the Payne Nation radio show.
Hippopotomonstrosesquippedaliophobia- fear of long words
Yes, this world is filled with contradictions, oxymorons and stuff that simply don't make sense. There was a time we would actually rely on the stock market to help us figure out the future. It was a harbinger of things to come. It was an oracle for the next six months to a year. These days, the market is treated either with complete scorn or like a broken clock that's sitting around for decoration. I get why there is skepticism, but I think people connect the dots in a way that doesn't make sense and act in a way that is completely contradictory. Virtually everyone reading this commentary will live to be 65 years old and 90% of those folks will reach 100, and yet, only a sliver are prepared to live a good and long life.
According to Gallup, the average non-retired American is now expected to retire at the age of 67, that's up from 63 a decade ago and 60 in the mid-1990s. This would be an extension of an actual trend that has seen the average retirement age climb to 60 from 57 in 1991. I often write about the nation peaking with subsequent generations living a less prosperous life than those before them and that might be the case for retirement, too. According to the poll, 38% of non-retirees expect to live comfortably in retirement versus the 72% of current retirees that say they have enough. Of course, in a nation that's struggling, many don't have enough to live comfortably now.
Interestingly, those in their greatest earnings years are most worried about having the right funds.
At the same time that the Gallup Poll came out, Bankrate.com released its poll on American's attitudes about investing. Apparently 76% of Americans say they're not inclined to invest in the stock market. This is an amazing statistic. Sure we know there is the recession, there was that big crash and there are non-stop stories about the evils of Wall Street. I get where many believe the end of the world is near come election day in November. I get all of that stuff, but I don't get what the game plan is for those that know they're not prepared yet refuse to invest.
People are putting money into bonds! That's what governments and Central Banks buy for safety, not to take a trip around the world while sporting that new gold watch. Heck, this game plan means pawning that watch the day after your retirement party. It doesn't have to be this way. In fact, this is plain lunacy. According to Investment Company Institute, last year saw $134.8 billion come out of domestic mutual funds. Thus far this year $16.7 billion has come out as there have been ten straight months of net outflows. I'm trying so hard to get people to wake up. Last week we had a bunch of winners, some huge, but many subscribers had already closed out those ideas.
The reasoning for closing positions before the alerts ranged from:
Some other idea was down big
The economic data wasn't looking good
There was a small profit and that's better than nothing
It was taking too long
I get it. We are all human and thus emotional. I've been doing this for a long time and even take action based on assuaging those emotions, but we can't be self destructive. The market rally, while still squarely focused on money printing (manipulation), has a fundamental component that has passed from the emerging market story to a domestic story.
Longer term, it will be an emerging market story again. I sit here and just know that so many of those that tell my representatives they want to wait or have no faith in the president will jump on the bandwagon at Dow 15,000. I have no faith in the president, but I have a ton of faith in American businesses.
I have a ton of faith in the American public. And I know the rest of the world is hooked on this thing we no longer hold in high regard-capitalism. I should say the rest of the world outside of Europe where the drumbeats are getting louder for Socialism. If Hollande wins on Sunday, it could spark a wave of Socialist fever across the continent. It's almost laughable that some are calling austerity a failure after weeks or a couple months, and want to stick to the wild spending that has wrecked their economies. I suspect right-thinking leaders of Greece, Spain, and Italy will throttle back on their ambitions of fiscal responsibility.
Perhaps the greater test of resolve to correct massive overspending will be the referendum in Ireland on May 30. The nation agreed to a bunch of measures in order to get 87.0 billion in bailouts from an assortment of lenders back in November 2010. Back then, deficit to GDP was racing at 32% and now it's all the way down to 10%. The stated goal of getting the deficit to under 3% of GDP by 2014 is in place but now it's in jeopardy. This new referendum vote came out of left field and appears to be gaining traction. Apparently, 80% polled to continue with new discipline but that number is now down to 47%, with 35% saying no and 18% undecided.
When this debacle began in Europe, I predicted Ireland would come out of it first because they are still eager and still understand the benefits and true freedom of economic independence. Of course many don't think being led around by the nose is independence, but it is the price one pays for economic sins that result in the need for bailout. I'm rooting for Ireland which is indeed enduring tough parameters to meet its goals.
Welfare and other benefits cut
Wages for middle class cut 15%
Sales tax 23%
New household tax €100
New water usage tax
Car fee of $205 to $3,045
I think the exodus of young people will begin to reverse, and Ireland will prove to the world and, more importantly, its European neighbors that austerity works.
Some form of austerity has to stay in place if for no other reason than all the frivolous money was spent a long time ago. The crazy thing is this wave toward spending even more money and punishing the rich and not-so-rich will have a billion dollars behind it in America. Does anyone find that weird? A true anti-wealth campaign should be mostly word of mouth and limited to a couple hundred million. Of course, that old saying "it takes money to make money," applies even to the haters that want to limit generational wealth and besmirch all self-made success stories.
Demonization of Great Parents and Grandparents Continues
I've written about how the "silver spoon" comment by Obama disrespected the hard work of families to make life easier for their offspring. That line of attack continues and it's really irritating. Somehow, parents that leave their kids something is bad and those that squandered opportunity are heroic. Soon, we may be told that "Papa was a Rolling Stone" but the Temptations is an anthem for parents smart and considerate enough not to do a damn thing for their children. Hollywood is already working hard to make slackers and jerks heroes while promoting teenage pregnancy. Destroying values is the last nail in this dependency culture we are all being herded into.
The irony of "Hippopotomonstrosesquippedaliophobia" being the fear of long words is almost comical. The irony of planning for a longer life without investing for a longer life is anything but comical.